Monthly Archives: March 2008

$2 a Share for shares that were trading about $60 last week! Amazing things you can do with $2 per share in a bearish market.

Over the weekend Bear Stearns showed its empty wallet to the Fed and managed to convince US Treasury Secy Henry Paulson for a bailout plan.

And over the weekend, the Federal Reserve cut its discount rate by 25 basis points and offered to lend money to several financial firms, in an effort to prop up the US financial sector. Well, a lot of props have been put already (refer our previous posts on US Banking sector crisis).

With the help of further cut in discount rate, JP Morgan Chase offered to buy rival investment bank Bear Sterns for $2 a share, with a total value of $236 million. It could have been 99 cents per share as well, but no, that would look too bad! The deal occurred Sunday night, with the US federal government acting as a catalyst to avoid a bankruptcy.

For anyone who’s been looking at Bear Stearns, Cash flow problems have been brewing for the last few months – they had clearly over leveraged themselves – and this weekend did it.

To quote AP news:

JPMorgan Chief Financial Officer Michael Cavanagh did not say what would happen to Bear Stearns’ 14,000 employees worldwide, or whether the 85-year-old Bear Stearns name would live on after surviving the Great Depression and a slew of recessions. He told analysts and investors on a conference call that JPMorgan was most interested in buying Bear Stearns’ prime brokerage business, which completes trades for big investors such as hedge funds.

JPMorgan inherits some liabilities as well. For example, about $16.5 million property liability in the form of lease rental agreement that Bear Stearns had signed in London with the Canary Wharf Group (CWG).

This news over the weekend has resulted in hard falls of various stock indices across Asia as well. The Indian Sensex fell 951 points today (6% drop in one day).

A lot has been talked about Google’s acquisition of DoubleClick, and whether they can show tangible improvements or new services as a result of it. DoubleClick has a strong platform for display advertising, and that’s the main reason Google bought it, so that it can give a good offering for a variety of media advertisements. Yesterday, Eric wrote this note on Google’s blog:

3/11/2008 09:48:00 AM
Posted by Eric Schmidt, Chairman and CEO

I’m pleased to share the news that we completed our acquisition of DoubleClick today. Although it’s been nearly a year since we announced our intention to acquire DoubleClick last April, we are no less excited today about the benefits that the combination of our two companies will bring to the online advertising market.

Because we have been waiting for regulatory approval for our acquisition, we’ve been limited by law in the extent to which we could conduct detailed integration planning to map our way forward. That work will begin in earnest now. Although we don’t have detailed plans to announce today, we will communicate regularly with you about our progress in integrating our two companies.

An immediate task we’ll undertake over the next few weeks is matching and aligning DoubleClick employees with our organizational plan for the business. This will involve determining the right staffing levels for all functions and will ensure that we have the right people assigned to the right responsibilities within Google. We plan to complete this process in the U.S. by early April.

Outside the U.S., the steps we will propose are subject to consultation with employee representatives where applicable, and of course any decisions will be made in accordance with local law. The exact timing of the process outside the U.S. will vary based on the needs and requirements of each region.

As with most mergers, there may be reductions in headcount. We expect these to take place in the U.S. and possibly in other regions as well. We know that DoubleClick is built on the strength of its people. For this reason we’ll strive to minimize the impact of this process on all of our clients and employees.

On a personal note, self employment for those with family is fraught with another set of problems. A steady paycheck keeps a family well supported and many money worries at bay, while self employment may be more akin to times of feast or famine. Are your family members willing to help you achieve your dream of being self employed?

The post is not aimed to discourage anyone — it is more to give you a feel of the typical challenges he has seen. The biggest challenge we can point towards is that there is no more a guaranteed income source. You will have to put your best efforts, and the income may not not come.

Some more thoughts from our experience of seeing various entrepreneurs:

If you have a family to support, then you should have at least 6-12 months of living/operating expenses in your bank. Plan to have little or no income in the first 3-4 months. That is a very real scenario

If you are offering services, don’t waste time on prospects who are not interested. Time is very important, and its better to reach as many prospects as you can, and let the interested ones reply back.

If you are offering products on your website, then promote that site through a few blogs, press releases, and reputable article sites. Feel free to contact us if you feel stuck. No, there’s no fee for such help!

If you have any property or inventory, that should also be insured. Also ensure that everyone in the family has comprehensive health/medical insurance. Nothing can probably hit your new business harder than sudden large outflows of cash arising from uninsured expenses/damages.

———————————
More Test Results: These tools are working. On our test site, we have got 30% increase in real visitor traffic in 2 days – that’s a significant increase worth reporting. But we spent a whole day in learning the system. So it is important to follow the tutorials to the exact word.

———————————

Our Original Post from March 2nd:
———————————

Now, which online business does not want to increase their online traffic? We can’t think of any! Whether you are selling insurance, or real estate, or credit cards, or printer-ink, or any other service, you want “interested” people to come to your site. We call that targeted website traffic.

A couple of days back, a new product suite has been launched by Bishop Anders from Texas, which looks like the most comprehensive website traffic generation system there is. In addition to 26 simple and complex tools, the package includes informative videos and guides to help you understand the full framework.

The tools are showing promising results in our experiments (remember we have lab to test these new products), and hence we will recommend this product. If you have an online business that needs more visitors, then should be good for you.

It operates on a monthly subscription fee $97 (easily worth the amount) for the value, and one can also try it out for 10 days with just $37. Learn more at their website:Web Traffic Machines

It is very important to understand that not all the tools in the package will be useful/relevant for each website/online business, and that you will need to see these as long-term helpers, rather than short-term tactics which could get your website under scrutiny, which is not good.

The membership slots are limited, so if you like it, join risk-free using the trial offer rather than losing the slot.

So you’ve got hundreds or thousands of people looking at what you have to offer. What now? While generating sales leads is definitely the first step, the leads you get are worthless until you learn to convert them to customers. It’s time to complete the cycle with five proven methods to increase the number of leads that turn into paying customers.

1. Build Personal Relationships

In today’s fast paced, high tech world, it’s easy to think that sales and marketing have changed from being people to becoming big faceless corporations. Well the simple fact is that people still buy from people.

Think about it. Have you ever walked out of a store because the sales staff was obviously more interested in chatting with their friends then seeing what they could do to help? Have you ever dealt with a rude customer service representative who told you that everything was your fault and they couldn’t do anything about it? Have you ever decided not to deal with a company because the people are not very nice? We all do it.

Companies have come up with all kinds of ways to get people to check out their product or service, but if the people you meet when you walk in are unfriendly or unhelpful the sale never gets made. The people who deal directly with customers need to be friendly, helpful, and take an interest in the real lives of every potential customer who comes in. Work on making the interaction between sales people and new customers personal and friendly. More than anything else, people buy from people they like.

2. Better Company Image

Never underestimate the power of a trusted brand. When all else fails we tend to go with the names we know and trust. If your company has a trusted image, then the products or services you offer inherit that same trust. Have you ever shied away from what looked like a good deal because it was coming from a company you’d never heard of? I know I have.

So how do you build a better company image? Well there’s a lot to it, but one of the basic elements is familiarity. Familiarity breeds trust. People are naturally wary of things they don’t recognize. So get your name out there, sponsor community events and keep doing it.

Building a strong company image takes time so don’t expect this to happen overnight, but there’s a reason big companies do it. Then next time you watch a commercial for a big company watch for the product promotion. Many times you won’t see it at all; all you’ll get is a feel good message about the company. There’s a good reason they do that.

3. Better Products & Services

Improving your product or service to help the people you are trying to help can increase your sales conversion dramatically. Most big companies spend about 10% of their revenue on introducing new and improved products.

In many of today’s fast paced markets constant improvement is a must. The secret is to pick a specific target market niche, and focus your improvements on that market. If you try to satisfy everyone with your next big improvement you will end up satisfying no one.

4. Targeted Communication of the Value

The more focused a company is on its target customer the more likely they are to succeed. Instead of trying to satisfy everyone, choose a specific market and focus on it; even if your product or service is also a great fit for other markets.

In the early sixties Coca-Cola was outselling Pepsi-Cola by approximately 5 to 1. That was until Pepsi decided to stop trying to sell Pepsi to everyone and decided to focus all of its marketing efforts on the teenage market. They launched the choice of a new generation and hired teen icons like Michael Jackson and Lionel Richie. The result was that in one generation Pepsi went from being outsold 5 to 1, to being only 10% behind Coca-Cola in sales.

More companies have failed by trying to reach too broad of a market than have failed trying to reach too narrow a market. A good measure of whether your chosen niche is too large is to consider whether it is reasonable to expect that 80% of the people in your niche will have heard of you in the next 12 months. If that’s not achievable then you should consider narrowing your niche. Chose you niche and focus on it.

5. Better Follow Up

Most people don’t buy anything as a result of the first contact. It takes time to build the value of a new thing up in our minds to the point that we are willing to open up our wallets. On average you have to contact a person between 3 and 7 times to get a sale, even if you are selling something that person is looking for.

When you follow up, don’t push for a sale. Just ask if they got the initial information, and ask if they have any questions you could help them with. If the offer is something the person would consider, then they appreciate the help in a friendly relaxed way. If it’s not something they are looking for right now, it’s a long shot that you are going to convince them they need it. Your objective is to follow up enough that people who are looking for the kind of help you have to offer will think of you first when they decide to buy. People who don’t need what you have won’t buy; don’t waste your efforts there. Keep your offer on their mind for a while, and the people who need it will respond.

Summary

There is definitely a lot to say about converting leads into customers, but these five tips should get you thinking along the right lines. Build your personal relationships. Build a trusted and familiar company image. Continually invest in improving your products and services. Target your advertising to a specific group of people. Follow up to keep your offer in the minds of the people who can benefit from what you have to offer.